ENTERTAINMENT CENTRE IN DONETSK (UKRAINE)

PROJECT

General description of the Project: an extraordinary Entertainment Centre (EC) in the City of Donetsk (Ukraine). After putting into operation the complex shall include a pub, a café, an exhibition hall-gallery of modern art, a restaurant, a casino, several bar units, a dance hall of the night club (now exists), a bar of the night club with 30 m counter (now exists), a lounge bar, a hookah hall, VIP-rooms, a concert hall of 800 sq m, sauna, a bowling, a billiard hall, boutiques, a trainer hall, a beauty saloon, a summer ground, hotel rooms, a swimming pool, and, of course, kitchen premises, offices, storage facilities and service rooms.

Mission: to satisfy requirements of exclusively refined and particular EC guests, to bring up people’s taste and sense of beauty. We would like to provide people with the opportunity to get or to learn something new, the things previously left beyond their attention or understanding, especially in arts and modern music trends. VELVET EC is to become the place of communication, making acquaintances and cognition of the World in all its colors and multiple forms. Thus, first of all we are speaking of the EC popularity among the inhabitants of Donetsk City and Region, further of Ukraine, and, consequently, the Project’s financial prosperity.

Just touch and try the things you read, saw, heard or dreamed of: here everything is accessible for YOU!

Aims: Entertainment Centre having no analogs either in the town or in the region in service standards and variety as well as highly developed infrastructure for rest and entertaining shall become the centre of CULTURE and REST providing the high profitability considering the lack of serious competitors and similar services of such level to be achieved by the EC personnel.

Strategy: permanent improvement of the rendered services’ level; extension of services’ assortment; personnel training and professional qualification growth.

Unique competence: high professionalism, creative potential and the wholehearted attitude to the business. We are not afraid of difficulties as we know the ways to solve our problems and to achieve our targets.

Inspiration of the Project crew: to invest in personnel search, people training, professional qualification improvement and evaluation that is priority directions of the company’s inner policy.

General range of investments: from USD 3,000,000.00 to USD 10,000,000.00. Such broad variation in the sum proposed for investments originates from possible variants of property of premises used as the basis for VELVET EC. If we form the complex based upon the rent of the premises offered for reconstruction that is the existing building of KRISTALL (CRYSTAL) Cinema then the level of required investments shall be USD 3M. If we purchase the building of the Cinema (to build elsewhere) then the required sum of investments shall comprise about USD 10M.

Besides, the sum of investments needed shall depend upon the possible desire of an investor to buy a piece of land and to construct the own building of EC or to buy (to rent) another premises instead of the Cinema.

There is one more factor of influence upon the investment value, that is what EC include and what is the idea of the complex. It can be a commercial and entertainment centre, or an entertainment centre of culture and rest, or a hotel complex with multiple services and entertainments, etc. as well as all these versions within one unit. What is principle is the maximal availability of services and entertainments represented in a single building where all elements just complete each other without making it redundant. Such complex could be unique in the City and Region.

The next factor of influence upon the investment value is the spirit of the Centre, its leading element. We could make the largest bowling centre in Donetsk providing it with maximal complex of services, or it can be IMAX Stereo Cinema for wide-frame films (http://www.imax.com) with the developed infrastructure for rest, or movie and concert hall extremely needed in our town, or EC basis upon hotel business. Thus everything depends upon an investor’s personal preferences considering all pros and contras that are agreements and compromises I am ready to enter.

My personal contribution in VELVET EC is around USD 500,000.00. My concept was based on gradual development in steps from the night club to the entertainment centre. However, one dance hall is not enough to earn sufficient money for development, and when in spring 2007 the building of the cinema was transferred from municipal property to the private one I have got new opportunities for the building premises utilization. On that ground I decided to look for a co-founder of VELVET Project. And finally, who except a person who has invested his own money to business can do the all his best to provide 101% effectiveness of an enterprise? Today the guarantee I can present is my honest name, a good expertise of the business and my own USD 500,000.00 invested in the Project.

Ways of financing: I think, an optimal way is an investment credit or a project enterprise opened together with an investor on the terms of share membership (the percentage of shares to be agreed). Securities of a new project enterprise could be distributed according to an option scheme with the quarterly repayment of my share in authorized capital. If you find my proposals to be unfit or requiring some revision them I am ready to compromises.

Period of the Project execution: the Project’s planned payback is to be within 1.5 to 2 years considering USD 4M investments on the terms of the premises’ rent (calculations are available). The schedule of financing sums utilization as well as monetary flows scheme shall be developed after the EC complex of services and entertainments together with the enterprise conception have been agreed with an investor.

Premises: the total area counts 3,000.00 sq m. The house was constructed in two levels however the cinema hall covering 800 sq m of the total area is placed on the one level. The potential of KRISTALL Cinema is large enough as the building itself satisfies a lot of criteria, and namely has sufficient square and high walls suitable for light and acoustic equipment installation thus supplying a good space and air for guests without the feeling of compression and closeness. Location place: in the majority of cases it is the proper choice of the site that predetermines the success of an entertainment centre. Any popular place designed for guests of medium and higher incomes by all means shall be located within the urban area 5 to 10 km from the city centre. As for VELVET EC it is positioned in the park zone and, at the same time, 300 m from ZOLOTOYE KOLTSO (GOLDEN RING) Commercial Centre and 3 km from Lenin Square, a central point of the town. GORSAD Transport Junction is one of the largest ones in the town. A nearest proximity of YUZHNYY (Southern) Bus Station shall give the chance to attract Region inhabitants to the Centre entertainments due to easy access, arrival and departure from the Centre. One should mention a KOSMOS Circus, the only one in the whole Donetsk Region, located 200 m from the Cinema, and AMSTOR Hypermarket 150 m apart. There is one more positive factor: since 2007 all public events of the town have been removed from Lenin Square to SHCHERBAKOVA Central Park where the Cinema is situated. A stationary equipped concert ground of the town shall be put 100 m from KRISTALL Cinema. Besides, a full reconstruction of the Park has been already started to be completed in the nearest 3 to 4 years including all attractions. If we arrange advertisement and pointers scheme in proper manner, put a light gun or laser on the building it will minimize the existing inconvenience due to negligible distance from popular roads. Considering adjacent parking places of SHAKTYOR Stadium the parking facilities provided for EC guests look practically unlimited.

Licenses required: license of alcohol and cigarettes sales.

The Project Initiator: POTAPENKO ALEKSANDR Anatoliyevych

Date of birth: 19.12.1970

Place of birth: City of Donetsk

Origin: white-collars’ family.

In 1986 I became the student of Abakumov Mining College where combined my study with the work of disc-jockey and sound director at Franko Cultural Palace.

In 1990 I was called to military service after which, in 1992, got employed as a sound director of Children and Youth Arts Complex. At the same time I was involved in business dealing with mine props supply to Donetsk Region coalmines and that of coal to Western regions of Ukraine.

In 1996 a discotheque was opened on the basis of the Complex that was very popular among citizens: 700 to 1,000 guests per occasion.

In 1998 I entered Donetsk Academy of Management specialized in Non-Production Management.

In 1999 I got and invitation to take the position of director of AUVIKOR LTD dealing with the system 16 TON Music Shops in the City of Donetsk. Those shops were specialized in the sales of CD, audio and video cassettes and DVD with records. At the same time was involved in promotion action of the system arrangement in the form of concerts by Zemphira, Valeria, M. Krug, Mummy Troll group, Demo Group, etc.

In 2002 I founded my own enterprise in the sphere of sales of audio and video carriers with records. From time to time my retail sales system included up to eight shops within supermarkets and trade centers of the town like AMSTOR, BELY LEBED, BUM, EUROPE, SAREPTA, CHICAGO Night Club, etc. There were also two wholesales warehouses of audio and CD.

In 2005 I initiated the reconstruction plan for NDS Night Club situated in VICTORIA Hotel Complex (http://www.victoria.ua). That reconstruction included a lot of tasks: besides the enterprise’s interior, logotype and idea development and embodiment we solved the problem of the club sound insulation related to rooms of the hotel complex. After RED LINE Club was put into operation (http://www.victoria.ua/relaxation/redline/) in December 2005 I was working as its Manager up to April 2006.

From autumn 2006 I am restructuring KRISTALL Cinema on the terms of rent and for own expenditures to create VELVET EC (http://velvet.com.ua). Like with RED LINE Club I am the owner of idea, project, logotypes and interior. Besides, I deal with reconstruction operations and selection of personnel.

The only thing left to add is that I do not drink alcohol, do not smoke and never take narcotic drugs. I never catch cold without mentioning serious diseases.

Family status: married; daughter Milana, my first child, was born on 5 September this year.

My whole welfare is due to my own efforts. It is for about 20 years that I am involved in services and entertainment business thus the period of attempts and mistakes belongs to the past. I understand requirements of the market having good knowledge in the subject of my work and specifics of business. Geography of my contacts in the sphere covers not only whole Ukraine but Russia too. As for Donetsk this is my native town where I was growing up and felt myself to be a person and a businessman. My life credo: first you work for an image then the image works for you. I never wished to be satisfied with transient profit. Due to my competence and reliability I can look honestly to people’s eyes.

I am very thankful for your attention to my project and hope for long and fruitful cooperation.

Best regards

Aleksandr Potapenko

E-mail: velvet@velvet.com.ua